More Than a Paycheck: How Technology Is Modernizing the Pay Experience
Modern tech revolutionizes payroll, empowering employees.
Improved technology and positive employee experiences have created the demand for a modern pay experience. On-demand pay, salary payments via mobile apps, and the instant withdrawal of earned wages are replacing the bi-weekly pay cycle and payslips, says John Pearce of CloudPay.
The world has been in a heightened state of uncertainty for the last three years. The global pandemic accelerated the pace of workforce transformation leading to worker shortages and changing talent expectations. In 2023, tumultuous economic conditions and continued layoffs across certain sectors are increasing fears of a recession.
Economic conditions aside, it’s an exciting time for those who are building or looking to purchase HR technology. Over the last year, there has been increased demand from global workforces looking for an improved experience, which has, in turn, driven an uptick in businesses investing in tech innovation, specifically in payroll technology and systems.
The Rise of the Modern Pay Experience
Just as we migrated from office-based, face-to-face meetings to at-home Zoom meetings and from in-person events to virtual experiences—and back again—the technology organizations use to pay employees has gone through considerable change.
This emphasis on improved technology and positive employee experiences has created the demand for a modern pay experience. The traditional bi-weekly pay cycle and paper checks are falling by the wayside. In its place are on-demand pay, salary payments via mobile apps, and the ability to withdraw earned wages instantly.
We’ve moved from clunky, mismatched, and clumsy software integrations to digital, cloud-based, global platforms that are intuitive, fast, flexible, and accurate. Smooth and seamless integrations across payroll, treasury, and HCM functions are critical for employers and employees. It’s not just a matter of convenience; several ongoing trends and factors shape these demands.
Trends Shaping Payroll Technology
Here are the three primary trends shaping the evolution of payroll technology.
1. Increased need to demonstrate ROI
While there is a demand for innovative technology, economic conditions are forcing organizations to invest wisely. Technology must increase efficiency, improve accuracy, and provide critical data analytics to assess performance.
Payroll and HR teams are more accountable than ever for sticking to a budget and proving value to the organization. This means companies need tech that saves them time, money, and resources.
2. Changing employee expectations
Much of the modern payroll experience is now driven by employee expectations. Before the pandemic and the rise of remote work and the gig economy, employers called the shots and controlled the method and timing by which employees were paid.
Employees now have considerably more power and influence. They, too, are reacting to the uncertain economy and want more control and flexibility regarding their wages. According to a recent Everest Group report, today’s workforce, whether millennials or Gen Z, truly believes it deserves access to the wages it has already earned. They also prioritize financial wellness and don’t want unexpected expenses to throw them into debt.
This drives increased interest from HR teams for on-demand pay or earned wage access and other financial wellness benefits. They see these tools as not only essential to meeting employee needs but necessary for retention purposes. In an environment where talent still has the upper hand, employers must find creative ways to keep them.
See More: Building Better Employee Experiences
3. The global nature of work
Additionally, more and more mid to large-size organizations are employing workers globally. The talent pool has gone global; new technology is needed to manage that workforce.
There are many complexities associated with paying employees in different countries. Each country has its rules and compliance regulations; even local jurisdictions in the same country have different rules about how and when people are paid. Keeping up with that is a challenge that technology and the right partner can simplify.
The Myths Holding You Back
Payroll and HR departments have traditionally been hesitant to adopt new technology. Because payroll is incredibly complex, and you’re dealing with people’s income, change can be scary. There’s also concern over whether a new solution will improve processes without sacrificing security. Some of these concerns are nothing more than myths.
1. Implementing new tech takes too long and overburdens teams
Anytime you change processes or adopt new technology, there is an adjustment period. But a great partner with the right experience and expertise will guide you through that quickly and with ease.
There is a common misconception that upgrading payroll tech is laborious to implement. It’s quite the opposite. The solution can be up and running in as little as two weeks.
There is also an unfounded belief that offering flexible payment options adds an administrative burden on in-house pay functions. In reality, complex, manual payroll processes are more burdensome for teams in the long run. While there does need to be a level of re-education around new payroll processes, the right partner will offer resources and assistance.
2. Providing flexible pay options is expensive
Flexible payment solutions shouldn’t cost a dime for employees. Employers should structure it as a benefit to employees that is 100 percent covered.
As an employer, new solutions will likely have an upfront investment but pay huge dividends. They position your company as one that understands the needs of its employees and help attract and retain key talent. With talent in place, this keeps hiring costs low and serves as a competitive advantage.
Additionally, by upgrading your payroll technology, you can save internal teams valuable time by automating administrative tasks and streamlining processes. This frees teams up to focus on more revenue-driving initiatives for the company.
See More: How On-demand Pay Empowers Employees and Businesses
3. Offering pay on-demand is risky
Offering flexible and digital payroll solutions opens a company up to security risks. There’s also the fear that employees will make poor financial decisions if they have 24/7 access to their pay. These worries are unfounded.
The right partner will have strong security, reliable backups, and methods for encrypting data as it moves through digital channels. Employee information is always protected, and transactions are always validated.
When deploying on-demand pay as a benefit, employers have full control of how much earnings are available to employees. In some cases, employees can also set limits for how many times in a payroll period they can draw down and a maximum amount, or a maximum percentage, of earnings they can access.
Embrace the Modern Era of Payroll Solutions
As businesses look for more and better ways to reduce costs, simplify processes, and meet employee expectations, technology is a viable option to achieve those goals. While difficult, the upheaval of the last few years has led to rapid innovation and advanced solutions.
HR and payroll teams now have the potential to drive business results and performance in ways they never have before. By embracing new technology and solutions, teams are proving they are no longer cost centers. They are revenue generators essential in the fight to find and keep talent.
Do you think modern payroll solutions can help drive business success? Let us know on Facebook, Twitter, and LinkedIn. We’d love to hear from you!
Image Source: Shutterstock
MORE ON MODERN PAYROLL
